Co-op reduces direct-only rates
From Friday customers will be able to access a 5-year fix at 2.79% for 60% LTV and a 2-year fix at 3.79% for 85% LTV.
And the bank’s new 90% LTV 2-year fixed rate mortgage at 3.99% has been extended to its Share to Buy mortgage which enables borrowers to get on the property ladder by taking out a mortgage jointly with friends, a partner or relatives.
James Hillon, head of mortgages at The Co-operative Bank, said: “With the Christmas rush upon us and a new year fast approaching it’s a good time to review your finances and to look at ways to cut down on outgoings in 2013.
“We’re determined to give customers a helping hand and at a time when the average mortgage arrangement fee is over £1400 we are offering fee-free mortgages across all LTVs in addition to a wide range of market leading rates.”
Hillon added: “We’re also increasing our support for first-time buyers through the Funding for Lending Scheme by extending our 90% LTV mortgage to those buying with friends via Share to Buy.”
Michael Ossei, personal finance expert at uSwitch.com, said: “Five year fixed-rate mortgages have hit a new ‘low’ with the launch of Co-op’s new market-leading loan, which wins hands down on both fee and rate.
“The latest addition to Co-op’s mortgage range could prove a hit for homeowners looking to lock-in and secure an attractive rate. With an arrangement fee of just £999 and a low rate of 2.79 per cent, this new mortgage will offer peace of mind although some may still view the fee as a hefty price tag.
“And at 60% LTV, this mortgage could still be out of reach for many, particularly first-time buyers who are unlikely to be able to scrape together such a hefty deposit.
“The next best option for homeowners who can only muster a small deposit could be the Yorkshire Building Society’s five year fix. At 3.04%, it only requires homeowners to borrow up to 75% of the property’s value. Based on the average house price of £248,958, that is a difference of £99,583 deposit with Co-op and £62,240 deposit with the Yorkshire Building Society.
“Borrowers will now be hoping that the Co-op’s cut rate deal will encourage other lenders to follow suit, giving those looking for more security more choice.”